I live in Helsinki. Finland generates 95% of its electricity without fossil fuels — nuclear, hydro, wind. My grid is among the cleanest on Earth.
Every month, I pay a small add-on on my electricity bill. 0.39 cents per kilowatt-hour with Helen, though Oomi charges 1.72 so that my contract says “renewable energy.” A green premium. In a country where nearly all the electricity is already green.
Where does that premium go? Into a Guarantee of Origin certificate. A piece of paper that says the electrons I consumed were “matched” to renewable generation somewhere in Europe. A Norwegian hydropower plant sells its certificate to my Finnish retailer, pockets the premium, and the actual electricity flows wherever physics dictates. The electrons in my wall socket are identical to my neighbour’s on a cheaper contract. The only difference is that I paid more for a label.
The most sophisticated greenwashing mechanism ever designed, hiding in plain sight on every electricity bill in Europe. But that’s a whole other article. Because once I started pulling on that thread, I found something bigger: a pricing system that made sense when European grids ran on fuel and is now absurd when they run on wind. And the reason nobody can change it.
In Finland, most of the time, I pay some of the cheapest electricity prices in Europe. The clean grid works. But the pricing architecture underneath it was built for a different world. And on the days it bites, it bites hard. When the wind drops and the reactor goes for maintenance, prices spike from near-zero to €397 per megawatt-hour. Same grid. Same day. And across the rest of Europe, where grids still need gas to keep the lights on every single day, this isn’t an occasional spike. It’s a permanent condition.
How your electricity bill actually works (and why it makes no sense)
Imagine a grocery store where every item costs the same and the price is set by the most expensive product on the shelf that day.
You’re buying rice. It costs the store €2 to stock. Pasta, €2.50. Bread, €3.70. But today, one customer needs saffron, which costs €17. So everything in the store, the rice, the pasta, the bread, is priced at €17.
You’d walk out. You’d call it a scam. You’d demand to speak to a manager.
This is how Europe prices electricity. Not approximately. Literally.
Every day, an algorithm called EUPHEMIA clears the electricity market across 27 coupled European countries and 61 bidding zones. Generators bid their costs. Solar and wind bid near zero as they have no fuel costs. Nuclear bids low. But somewhere in the system, a gas plant is needed to keep the lights on during a calm winter evening. Gas generation costs €80-130 per megawatt-hour once you include fuel and the pollution penalties that EU law requires gas plants to pay. And because the system uses marginal pricing, the most expensive generator needed to meet demand sets the price for everyone; that gas price becomes what everybody pays.
The wind farm that bid zero? Paid the gas price. The nuclear plant? Paid the gas price. The solar farm? Paid the gas price.
You, the consumer? You pay the gas price. For wind-generated electricity.
EU electricity market liberalisation began in the 1990s, and marginal pricing was the logical choice. Most generators burned fuel. Their costs were similar. The marginal price roughly reflected what electricity actually cost to produce.
But now we’ve built a grid where the cheapest generators produce most of the electricity, and the most expensive generator, needed for maybe 15% of hours, sets the price for ALL of them. As Oxford energy economist Dieter Helm puts it: “In a system with lots of zero marginal cost generation, the price of electricity for all the electricity generation should not equal the spot price of gas.” We’re running that grocery store where saffron sets the price for rice, except the store is now 80% rice and 5% saffron. And no one is allowed to change the pricing rule.
OK, so change it.
That’s the obvious response. The system is clearly outdated. Consumers are overpaying. Renewables are cheap. Just update the pricing.
Except every time someone tries, the same thing happens. Each layer of the answer is more infuriating than the last.
The people building clean energy don’t want it changed.
Think about it. If you’re a wind farm operator, your turbines produce electricity at near-zero cost. But you get paid the gas price. That gap between your zero-cost and the €80-130 gas clearing price goes straight to your balance sheet. Every megawatt-hour of wind you produce earns you gas money. The “broken” system is printing you cash.
So when the EU tried to reform electricity markets after the 2022 energy crisis, who lobbied hardest against fundamental change? WindEurope, the industry’s own trade body, stated its position plainly: “Keep short-term wholesale markets based on marginal pricing and the merit order,” yes, the system where the cheapest plants run first, and the most expensive one sets everyone’s price. SolarPower Europe’s head of regulatory affairs went further: “Changing the foundations of electricity markets, such as marginal pricing, is creating regulatory instability and actually halting investments into new renewable technologies.” They joined forces with fossil fuel incumbents who also benefit from the pricing mechanism. The entities building the clean energy future are financially incentivised to preserve the fossil pricing architecture.
The defenders of the system ARE the disruptors. Let that sink in.
OK, force them. Regulate.
The system has an immune system for that.
When gas prices spiked in 2022 after Russia invaded Ukraine, electricity bills across Europe tripled overnight. There was genuine political rage. Spain’s ecological transition minister Teresa Ribera captured it: “The current crisis has shown how vulnerable the current design of the electricity market is to stress situations, as well as the tremendous consequences for domestic consumers.” Ursula von der Leyen stood in the European Parliament in September 2022 and promised “deep and comprehensive reform of the electricity market.” It felt like the moment.
So what happened? Governments deployed emergency measures. Price caps. Windfall taxes. Direct subsidies to consumers. EU member states spent over €650 billion on energy support. And it worked. Prices came down, families were shielded from the worst.
But by successfully treating the symptoms, they removed the urgency to cure the disease. The pain went away. The outrage faded. By the time the “reform” was adopted in May 2024, it explicitly preserved marginal pricing. The Commission framed its own modesty as wisdom. The crisis that justified change also defused it.
Spain and Portugal tried something different, the Iberian Exception, capping gas bid prices and reducing wholesale electricity prices by roughly 40%. It worked. Then it expired on December 31, 2023. And no one renewed it because, by then, gas prices had normalised and the lobbying loop was back in control.
Crisis builds pressure → emergency measures relieve pressure → reform stalls → wait for next crisis. Rinse, repeat. The system survives by producing just enough response to prevent structural change.
Fine, but the EU reformed markets before. Just do it again.
The EU has 27 member states with completely different energy situations. France has 57 nuclear reactors and wants nuclear included in any new pricing scheme. Germany shut its last reactor in April 2023 and wants pure market signals for renewables. Nordic countries have cheap hydropower and don’t want to subsidise anyone else. Spain wants intervention. Poland is still burning coal.
Each country has effective veto power. The result is always a lowest-common-denominator compromise: reform that’s just enough to claim progress, never enough to change the structure.
The more integrated the market, the harder it is to change, because every country has a hand on the steering wheel and none of them wants to turn in the same direction.
But surely economists see this is broken?
They do. And the system has an answer for that too.
The current market design does one thing genuinely well. It makes sure the cheapest available power plant turns on first, every single hour. And because EU countries share electricity across borders through this system, it saves an estimated €34 billion per year compared to each country running its own separate market. When ACER, Europe’s energy regulator, was asked to assess the market, their answer was clear: “The current energy crisis is in essence a gas price shock, which also impacts electricity prices.” The current electricity market design, they concluded, “is not to blame for the current crisis.”
And they’re right. The system IS efficient. It’s efficient at solving a problem that no longer exists: price discovery among similar fuel-burning generators. But the problem changed. We went from a world where most generators had similar costs to a split world: near-zero renewables and €80+ gas, with nothing in between. The right answer to yesterday’s question is now the wrong answer to today’s.
The economists aren’t wrong. They’re irrelevant. And their correctness provides intellectual cover for everyone who benefits from keeping things as they are.
Five loops, no villain
Step back and see the whole picture.
The renewable industry won’t push for change because the broken system profits them. The financial infrastructure makes change terrifying not just for traders, but for anyone with a long-term energy contract. Imagine you’re a company that signed a 10-year power purchase agreement based on today’s pricing logic. Now imagine the EU announces it’s changing how electricity prices are calculated. Your contract, your bank’s insurance against price swings, the financial bets that investors have placed based on that contract, all of it suddenly references a price that works differently. Trillions of euros in financial contracts are built on top of the current price structure, the way mortgages are built on top of interest rates. Changing the pricing mechanism doesn’t just change tomorrow’s electricity price. It destabilises every financial contract that was written assuming yesterday’s rules would continue. That’s why Energy Traders Europe, representing over 170 trading firms, frames any reform as “systemic risk.” And they have a point, just not the one they think they’re making.
Add to that: emergency measures absorb political pressure before it can become structural. Twenty-seven countries can’t agree on which direction to go. And the economic consensus validates the status quo.
Each of these actors is behaving rationally within their own feedback loop. Nobody is the villain. That’s the whole problem. This is the textbook coordination failure. The exact same mechanism that makes capitalism brilliant at optimising within a system and terrible at changing the system itself. Each actor is individually rational, yet the collective result is irrational for everyone. The system needs to change, but no single actor gets enough benefit from changing it to justify moving first. So nobody moves.
And there’s a deeper trap. The EU’s stated policy goal is to deploy more renewables to lower consumer prices. But every new wind farm and solar panel deployed under marginal pricing creates another profitable actor whose business model depends on keeping the pricing system unchanged. The more successful the energy transition is at building clean generation, the stronger the constituency that opposes changing how that generation is priced. The policy accelerates both the disease and the immune system at the same time. The goals of the actors are not aligned. They’re structurally opposed. Consumers want cheap electricity priced near production cost. Renewable generators want high wholesale prices because the gap is their profit margin. The financial sector wants price volatility because that’s where trading profits come from. Politicians want to avoid crises, not reform systems. The EU thinks it’s solving one problem. It’s feeding two contradictory loops simultaneously.
Windfall profits fund the lobbying that shapes the intellectual consensus that frames reform as risky, which strengthens the financial lock-in that politicians won’t touch outside a crisis, which never lasts long enough because emergency measures act as a relief valve.
And the consumer? You and me? We’re the only actors in the entire system without a feedback loop that protects our interests. Every other actor has an organised mechanism to convert their interests into system-preserving action. Consumers just pay. They can’t individually exit, everyone needs electricity. They can’t easily organise, they’re diffuse, and the system is too opaque for most people to even understand what’s happening to them. That’s the binding constraint of the entire system. Not technology. Not economics. Not policy. The absence of an organised consumer constituency with skin in the game.
Remember that. It matters for what comes next.
I check my electricity app every morning now. Not because I can do much about it. Because once you see the gap between what you’re paying and what the electricity actually costs to produce, you can’t unsee it.
But the system is eating itself.
The part nobody in the lobby groups wants to talk about.
The more renewables you build under marginal pricing, the more renewables destroy their own revenue. Solar floods the grid during sunny hours, pushing prices toward zero or below zero. Germany recorded 457 negative price hours in 2024, up 52% from the year before. Spain saw its first-ever negative electricity prices in April 2024. Finland led Europe with roughly 700 negative hours, making about 8% of all hours in the year.
This is called cannibalisation. It means the electricity you’re producing is becoming worthless in the very moments you’re producing the most of it. German solar generators received, on average, only 60% of the baseload wholesale price in 2024. For every euro a typical power plant earned, a solar farm earned 60 cents, because its output was concentrated in the hours when prices collapsed. In Spain, monthly solar capture rates have already hit 20%, meaning that in peak solar months, solar farms earn a fifth of what a conventional plant earns, even as their hardware costs continue to fall.
The paradox: each new gigawatt of solar makes the previous gigawatt less profitable. To keep investment flowing, governments have to offer larger and larger subsidies, guaranteed long-term price contracts, and public support mechanisms to compensate for the revenue that the market destroys. EU solar installations dropped in 2025 for the first time since 2016. Not because solar is too expensive. Because the market makes it unprofitable even when it’s cheap.
The system designed to support generation investment is now undermining it. The market is consuming itself from the inside. And no amount of emergency measures can fix a structural contradiction.
This is the forcing function. Not a political crisis. Not an external shock. The market’s own logic, taken to its conclusion, breaks the market.
The alternative already exists. Most people just haven’t heard of it.
While the political system churns, some people have already figured out what the binding constraint is and built around it.
In Finland, roughly half of all electricity is produced under something called the Mankala model. Companies jointly establish a non-profit entity that produces electricity at cost. Shareholders pay production costs proportional to their ownership. No marginal pricing. No gas setting the price for wind. Just: what did it cost to produce? That’s what you pay.
Teollisuuden Voima operates Finland’s Olkiluoto nuclear reactors under this model, including Olkiluoto 3, the largest reactor in Europe, which came online in 2023. Their industrial shareholders get power at roughly €30-35 per megawatt-hour (blended across old and new reactors), stable and predictable. Regular Finnish consumers, meanwhile, still ride the spot market. When the wind blows, and Olkiluoto runs, they get some of Europe’s cheapest power. When Olkiluoto goes for maintenance, and the wind dies down — as happened in May 2024 and this winter multiple times — prices spike to €397 per megawatt-hour. Same country, same grid, radically different outcomes depending on whether you’re inside or outside the cooperative structure.
The cheap nuclear output is captured inside the Mankala structure. It never reaches the public price. That’s the structural inequality: industrial insiders get cost-based pricing, while households get the volatility of a market that swings between negative and 400. I live in this gap. You probably do too.
Now look across Europe. Thousands of energy cooperatives exist, representing more than 2 million citizens across 25 countries. Austria alone has over 4,000 renewable energy communities and growing fast. Belgium’s Ecopower cooperative has over 70,000 citizen members. In Germany, up to 47% of all renewable capacity was citizen-owned at its peak. Denmark’s wind cooperatives put 100,000 families into direct turbine ownership — by 2001, cooperatives owned 86% of all Danish wind turbines.
These cooperatives are structurally the same thing as Mankala: people organising to produce or buy electricity at cost, bypassing the marginal pricing system that forces them to pay gas prices for wind power. One model serves Finnish industry, the other serves European citizens. Same logic, different scale.
The EU’s Clean Energy Package formally recognised this model. A widely cited CE Delft study estimates that 45% of European renewable production could come from citizen-owned energy communities by 2050. But why stop there? For private consumption, the barriers aren’t technical. They’re regulatory. Most countries still lack proper frameworks for energy sharing between neighbours. Upfront capital requirements exclude lower-income households. Grid operators, whose revenue depends on the existing system, aren’t exactly racing to make cooperatives easy. And in the Nordics, you need a diverse generation portfolio; solar alone doesn’t work when the sun sets at 3 PM in December.
But none of these are fundamental obstacles. They’re design choices that could be changed. Denmark proved it works. Austria is proving it scales. The question isn’t whether cooperatives can replace marginal pricing for consumers. It’s whether the political will exists to let them.
What would a different system actually look like?
Academics and energy economists have been quietly working on this, even as the political system pretends the question doesn’t exist.
The most developed proposal is the Green Power Pool, designed by UCL’s Michael Grubb and colleagues. The logic is simple: if renewables produce electricity at near-zero marginal cost, why route that electricity through a market where gas sets the price? Instead, aggregate renewable output into a separate pool, price it at its actual average cost (which is falling every year), and sell it directly to consumers. When the wind doesn’t blow, and the pool can’t meet demand, it purchases from the wholesale market — gas, hydro, whatever is needed — and that balancing cost is added transparently.
Consumers connected to the Green Power Pool pay the blended cost: cheap renewables most of the time, with transparent balancing charges when needed. No more paying gas prices for wind electricity. Grubb’s team calculated that in the UK alone, pool-based electricity from existing government contracts would cost less than half the wholesale price — and the share keeps growing as more renewables come online.
Others propose variations. Jacques Percebois and Stanislas Pommeret at the University of Montpellier modelled a weighted-average cost system in which the market price reflects the actual mix of generators running, not just the most expensive one. The Spanish government pushed for fixed-cost contracts covering renewables’ lifetimes. The CEPR (Centre for Economic Policy Research) proposed keeping marginal pricing to decide which power plants turn on each hour, but layering mandatory long-term contracts on top, so the spot price drives operations but not consumer bills.
These proposals differ in mechanics, but they share one insight: the wholesale spot price should drive how generators operate, not what consumers pay. Operational efficiency and consumer pricing are two different problems, and lashing them together with a single mechanism is what creates the dysfunction.
None of this requires abolishing markets. It requires recognising that a market designed for commodity-cost generators doesn’t serve consumers when most generation has near-zero marginal cost but high upfront capital. As Helm wrote: “It is not particularly difficult to set out what an efficient energy system might look like. The wholesale market model of the twentieth century is being displaced by a twenty-first-century decarbonising market, with lots more zero marginal cost generation. It is increasingly a utility-style fixed and sunk cost system.”
The Mankala model IS this system, just built bottom-up by Finnish industry rather than top-down by regulators. Energy cooperatives are a bottom-up system built by citizens. The academic proposals are trying to make the top-down version politically viable. All roads lead to the same place: pay for what electricity costs to produce, not for what the last gas plant bid.
What’s happening now: optimisation vs. transformation
In Finland, Oomi, the country’s largest energy retailer with over 800,000 customers, offers Flex contracts that reward consumers for shifting electricity use to cheaper hours. Their customers save by running the washing machine at 3 AM instead of 7 PM, charging the car overnight, and heating the water tank when the wind pushes prices toward zero. Across Europe, Tibber has over a million users doing the same thing. Octopus Energy grew to 7.7 million UK households — the first time the top position in the UK market changed since it opened in the 1990s.
Germany has over 100 GW of installed solar and 1.8 million home batteries. Virtual power plants — where thousands of home batteries and solar panels are networked together and operated as a single power station, trading collectively on the market — are aggregating gigawatts of distributed capacity. Corporate PPAs, in which large companies sign direct purchase agreements with wind or solar farms to lock in a price for 10-15 years, reached 5.2 GW across Europe in 2024. Battery optimisation startups are raising hundreds of millions. Smart tariffs that vary price by the quarter-hour are becoming mainstream.
All of this activity falls into two categories, and the distinction matters.
Optimisation helps people navigate the broken system better. Shift demand to cheap hours. Your battery charges when electricity is cheap (or free, during negative price hours) and feeds back to the grid when prices spike — buying low, selling high, automatically. Smart tariffs give you granular price signals so you can respond. All of this makes the dysfunction more livable.
But it doesn’t change the pricing logic. The system adapts. Germany now requires new home batteries to be remotely controllable by grid operators. Feed-in tariffs are suspended during negative-price hours. Self-consumed solar is three to five times more valuable than exported solar precisely because the export price is set by the broken market. The system absorbs the rebellion.
Transformation changes the pricing logic itself. The Mankala model. Energy cooperatives. Green Power Pools. Pay-at-cost structures in which renewable output is priced at its actual cost, separate from the gas-determined wholesale market. These don’t optimise within the system. They replace it one community, one cooperative, one industrial consortium at a time.
And the most important insight: the optimisation layer creates the constituency for transformation.
Denmark’s cooperatives didn’t start as a political movement. They started as families wanting cheaper electricity. Then 100,000 families with turbines in their backyards became a political force that made Denmark’s energy transition impossible to reverse. They stopped being passive consumers. They became organised participants with skin in the game. The binding constraint — consumer organisation — was broken from the bottom up. Germany’s 3 million solar households aren’t just people who produce their own electricity — they’re voters. Octopus’s 7.7 million customers aren’t just price-sensitive switchers. They’re a base that could be mobilised for market reform.
Optimisation builds the infrastructure and the constituency. Transformation requires political action. But political action requires a constituency. They need each other.
Every lock-in can be broken. It just takes coordination.
History shows these systems can change, even those that seem permanently locked in.
The global banking system used to set interest rates using a benchmark called LIBOR. Trillions of dollars in mortgages, business loans, and financial contracts all referenced it. When LIBOR turned out to be manipulated, everyone said it was impossible to replace — too many contracts, too much risk. They replaced it anyway. It took a decade. They ran the old and new systems side by side, converted contracts in phases, and passed laws to handle the ones that couldn’t be converted voluntarily. The total value of contracts that moved to the new benchmark: somewhere between $200 and $370 trillion. The electricity market’s financial lock-in is real, but it’s not unprecedented.
The EU couldn’t get telecom companies to stop charging insane fees when you crossed a border. The industry lobbied for years, arguing that roaming charges were essential for network investment. Consumers had no leverage individually; you can’t negotiate with your phone company when you land in Spain. So the EU simply banned roaming charges outright in 2017. The telecom industry survived. The fees disappeared. Sometimes, the workaround for a lobbying deadlock is just: stop negotiating and legislate.
Germany went from operating 17 nuclear reactors to voting 513-to-79 to shut them all down — in less than four months. Fukushima hit Japan in March 2011. By June, the German parliament had passed the phase-out. When the forcing function is strong enough, and the political window opens, systems that seemed immovable can change fast.
The pattern is always the same: a forcing function that emergency measures can’t absorb, someone who finds a path around the veto, a phased transition so the old and new run in parallel, side payments to bring blockers on board, and legal infrastructure to handle legacy contracts.
The electricity market may already have its forcing function and it’s internal. Cannibalisation is not an external shock. It’s the logical consequence of the system’s own success at deploying renewables. As negative price hours double every two years and solar capture rates collapse to levels that make investment uneconomic, the mathematical unsustainability of the current design will become impossible to absorb with emergency measures.
The question is not whether the system will change. It’s whether the transition will be deliberate and coordinated or chaotic, forced by investment collapse.
So what can you actually do?
If you’re a consumer, the structural move is to organise. If you’re in a country with energy community legislation — and the EU’s 2024 reform now requires all member states to enable energy sharing — consider joining or starting a cooperative. Austria has over 4,000. You don’t need a rooftop to participate. A group of apartment buildings, a neighbourhood, a village — the legal frameworks are being built right now. This is how you stop paying gas prices for wind electricity. Not by waiting for the EU to reform. By building the alternative yourself, the way Finnish industry did with Mankala and Danish families did with wind turbines. Every cooperative that forms converts passive bill-payers into organised participants. That’s the binding constraint being loosened one community at a time.
While you’re building the longer game, the immediate practical step is getting on a dynamic tariff. In Finland, Norway, and increasingly across Europe, spot-price contracts let you buy electricity at the actual market price quarter-hour by quarter-hour. It sounds scary. The savings are real — ACER data show 30-40% for active users — but they aren’t really about the tariff. They’re about what happens when you start seeing your costs in real time. You stop running the dryer at 6 PM. You charge the car overnight. You notice, viscerally, that the same electricity costs nothing at 2 PM and €300/MWh four hours later. The tariff doesn’t save you money. Awareness does. And that awareness creates the demand for structural alternatives, because once you see the dysfunction hour by hour, you stop accepting it.
If you’re a climate tech founder, there’s an obvious optimisation play (batteries, demand response, VPP aggregation), and those matter. But the structural opportunity is in cooperative infrastructure. The biggest barrier to energy communities isn’t technology or regulation; it’s that forming a cooperative is hard. You need legal setup, financing, generation assets or PPAs, metering, billing, grid connection, and member management. Right now, starting an energy community means navigating all of this from scratch. The founder who builds cooperative-as-a-service — the Shopify of energy communities — solves the binding constraint directly. And critically: financing mechanisms that let people without upfront capital participate. The Mankala model works for the Finnish industry because industrial shareholders can invest. Citizen cooperatives need something different — community solar financing, fractional ownership, pay-from-savings models. The cooperative infrastructure gap is where climate tech meets financial inclusion, and it’s wide open.
Every product you build either reinforces the current market design or creates pressure to change it. Most do both. But the question of which side dominates now has a clear answer: does your product help consumers organise, or does it help them cope individually?
If you’re an investor: the companies that look like pure optimisation plays today — batteries, demand flexibility, VPP aggregation — are also the ones accumulating the distributed infrastructure and customer relationships that any future market design will need. You’re not just betting on their current revenue model. You’re betting on their position in whatever comes next. But the highest-leverage bet might be on the cooperative infrastructure layer: platforms that make it easy for communities to collectively own generation, share electricity, and bypass marginal pricing. That’s not a niche play. If CE Delft’s projections hold, 45% of European renewable production could flow through these structures by 2050. The plumbing for that future doesn’t exist yet.
And if you’re anyone paying for electricity in Europe: you’re not being scammed. You’re experiencing what a coordination failure feels like from the inside. The system isn’t broken. The problem changed. The decision framework didn’t.
We know better now. That means we can do better.
References
Market design and marginal pricing
European Commission, “Electricity market design,” energy.ec.europa.eu — overview of EUPHEMIA, marginal pricing mechanism, 27 coupled markets, 61 bidding zones, and the May 2024 reform preserving marginal pricing.
European Parliament, “The design of the European electricity market: Current proposals and ways ahead,” IPOL Study 740094, 2023 — comprehensive analysis of marginal pricing mechanics, liberalisation history (1996, 2003, 2009, 2019 directives), and reform proposals.
ACER, “Final Assessment of the EU Wholesale Electricity Market Design,” April 2022 — concluded the crisis was “in essence a gas price shock” and the market design “is not to blame,” estimating cross-border coupling benefits at €34 billion/year.
Lobbying and reform politics
WindEurope, “Response to the European Commission’s public consultation on the EU Electricity Market Design reform,” February 2023 — “Keep short-term wholesale markets based on marginal pricing and the merit order.”
SolarPower Europe, “Statement: EU Electricity Market Design,” January 2023 — Naomi Chevillard, Head of Regulatory Affairs: “Changing the foundations of electricity markets, such as marginal pricing, is creating regulatory instability and actually halting investments.”
Teresa Ribera, opinion piece for EurActiv, January 2023 — “The current crisis has shown how vulnerable the current design of the electricity market is to stress situations, as well as the tremendous consequences for domestic consumers.”
Ursula von der Leyen, State of the Union Address, European Parliament, September 2022 — promised “deep and comprehensive reform of the electricity market.”
Bruegel, “National fiscal policy responses to the energy crisis,” updated tracker — €646 billion in EU member state energy support measures.
Iberian Exception
La Moncloa (Spanish Government), “Government of Spain caps gas prices to lower electricity bills,” May 2022 — mechanism details and 40% wholesale price reduction. Expired December 31, 2023.
Cannibalisation and negative prices
Fraunhofer ISE / Energy-Charts.info — Germany: 457 negative price hours in 2024 (+52% year-on-year), 100+ GW installed solar capacity.
ENTSO-E Transparency Platform — Finland: ~700 negative price hours in 2024 (~8% of annual hours); Spain: first-ever negative prices April 2024.
Agora Energiewende, “Die Energiewende in Deutschland: Stand der Dinge 2024” — German solar capture rates ~60% of baseload wholesale price.
SolarPower Europe, “EU Market Outlook for Solar Power 2025-2029” — EU solar installations declined in 2025 for first time since 2016.
Finland: Mankala model and Olkiluoto
Teollisuuden Voima (TVO) annual reports — Mankala principle: shareholders receive electricity at cost proportional to ownership. TVO produces ~28% of Finnish electricity.
Finnish Energy, “Energy Year 2024” — Finland 95% fossil-free electricity; Mankala model covers roughly half of Finnish electricity production.
Nord Pool market data, May 2024 — Finnish spot price spike to €397/MWh during Olkiluoto 3 maintenance outage and low wind.
Energy cooperatives
REScoop.eu (European federation of energy cooperatives) — 2,500+ member cooperatives across Europe, 2+ million citizen members across 25 countries.
Austrian Coordination Office for Energy Communities (Österreichische Koordinationsstelle für Energiegemeinschaften) — 4,000+ registered energy communities in Austria as of 2025.
Ecopower cvba, Belgium — 70,000+ citizen members, 100 GWh/year renewable generation.
Danish Energy Agency historical data — by 2001, cooperatives owned 86% of Danish wind capacity; ~100,000 families held turbine shares.
CE Delft, “The potential of energy citizens in the European Union,” 2016 — estimated 45% of EU renewable production could come from citizen energy communities by 2050.
Alternative system proposals
Michael Grubb, Paul Drummond, Serguey Maximov, “Separating electricity from gas prices through Green Power Pools: Design options and evolution,” Institute for New Economic Thinking Working Paper, November 2022 — detailed Green Power Pool proposal.
Jacques Percebois and Stanislas Pommeret, “Reform of the European electricity market: Should we prefer a price based on a weighted average of marginal costs with cross-subsidies?”, The Electricity Journal, 2024.
CEPR (Centre for Economic Policy Research), “Electricity markets in transition: A proposal for reforming European electricity markets,” VoxEU, 2023.
Dieter Helm, “The Cost of Energy Review,” commissioned by UK Government, October 2017 — Equivalent Firm Power auctions, critique of marginal pricing in zero-marginal-cost systems.
Dieter Helm, “Ofgem’s supply model is broken,” April 2023 — “In a system with lots of zero marginal cost generation, the price of electricity for all the electricity generation should not equal the spot price of gas.”
Optimisation and market activity
Oomi Energia — 800,000+ customers, Flex contracts with consumption impact pricing.
Tibber — 1+ million European customers on dynamic spot-price tariffs.
Octopus Energy — 7.7 million UK household customers; first change of #1 market position since UK energy market opened in 1990s.
Bundesnetzagentur (German Federal Network Agency) — 1.8 million home battery installations in Germany.
RE-Source Platform, “European PPA Market Outlook 2024” — 5.2 GW corporate PPA volume across Europe in 2024.
Historical precedents
Financial Stability Board, “Reforming Major Interest Rate Benchmarks,” progress reports 2014-2023 — LIBOR-to-SOFR transition covering $200-370 trillion in financial contracts.
European Parliament, recorded vote on German nuclear phase-out, June 30, 2011 — passed 513 to 79.
European Commission, “Roaming charges in the EU,” Regulation (EU) 2017/920 — abolished retail roaming surcharges from June 15, 2017.
EU reform legislation
Regulation (EU) 2024/1747 and Directive (EU) 2024/1711, “Improving the Union’s electricity market design,” entered into force July 16, 2024.
European Commission, Recommendation and guidance documents on electricity market reform implementation, July 2, 2025.
Finland’s electricity prices
Yle News, “Finland had Europe’s third-cheapest electricity prices in 2025,” December 29, 2025.
Helen Energia, electricity product pricing, helen.fi/en/electricity.
Oomi Energia, supplementary services terms.